| TOP |
| 5th Report of Market Access Ombudsman Council (March 17, 1998) |
1. Complainant: Tokyo Chamber of Commerce
2. Ministry concerned: Ministry of International Trade and Industry
3. Complaint:
Whether or not a consigned product processing license is applied for and obtained, at time of product import, not only processing fees but materials costs, which should be paid for in the domestic goods, are subjected to tariffs.
For importing materials originally approved as domestic goods, the levying of tariffs cannot be acquiesced to; thus, in cases where permission for acquisition had been obtained, material costs should be tax exempt. The consigned processing licensing system, which was established to protect domestic industry, should be abolished.
4. Corresponding Policy of the Ministries concerned:
The consigned processing trade for which export approval is necessary pertains to the following two cases:
1) When exporting cotton and silk cloth as raw materials and commissioning the spot dyeing processing of textiles
2) When exporting tanned leather or semi-finished leather goods and commissioning the manufacturing of tanned leather, leather products and semi-finished leather goods
The reasons why approval is necessary in the above cases are as follows.
Japan's textile spot-dyeing processing industry is experiencing a trend in reduced value of production, owing to the leveling off of demand for Japanese-style dress, etc., in recent years. In addition, the working environment is severe and a long time is required to master the processing techniques, making it difficult to secure successors and new workers.
Moreover, in Japanese leather and leather products industries consist primarily of medium and small sized enterprises, and many of these enterprises belong to household industries being operated in a family-like way. Their business basis is unstable. In addition, these industries are often the main industries in the area which face difficult historical and social problems.
In view of the above circumstances, it will be difficult to abolish the current approval system that has been introduced to avoid causing adverse effects to business activities of Japanese industries concerned.
Despite the gravity of the situation for related industries in Japan, the Government of Japan has been implementing tariff reductions.